The Art of War, by the Chinese military philosopher Sun Tzu, has almost cult status in some unexpected places, from divorce courts to Facebook - where members can post his quotes on their pages.

The ancient battle strategist has long been popular, too, with corporate types eager to understand how to outwit their competitors. It also explains why business bookshelves groan with tomes on the leadership skills of Churchill, Napoleon and even Hitler.

It is something that Mark Herman understands well. Mr Herman, a vice-president at Booz Allen Hamilton, designs war games for the US military, politicans and business folk. The consultant is also the lead author of Wargaming for Leaders, a book that has been grabbing business readers' attention over the holiday period.

The obsession with war strategy does not surprise Mr Herman. He's been obsessed by it since he was 12. In his spare time he writes commercial war games and books and blogs on military history and war. “I would certainly raise my hand for having a lack of imagination.”

Mr Herman has been designing war games for c-suite professionals for more than 20 years, but it was the interest in war games by both clients and competitors that led him to write the book. He ascribes the increased popularity to the uncertain economic times. “I find that the more uncertain the times, the more popular they become, because obviously, when your balance sheet is growing by 20 per cent a quarter and all of your mistakes are submerged in success, then you are just growing rapidly - but when all of a sudden you are not growing rapidly, then it's like: "Now what do we do?'”

That said, Mr Herman should have known that the credit crunch was coming - he did a war game for a client which predicted it. “About three years ago, we did a financial game and one thing we postulated was that real estate prices would go down. We really had to work hard with the client to get them to suspend their disbelief to imagine this happening. But what was surprising was that as soon as housing prices dropped by a dollar, the thing kind of unravelled very quickly.” His games have also foretold the fall of the Berlin Wall and post-invasion chaos in Iraq.

War games for corporates are not the same as those used by the Pentagon or Nato. “What we do for businesses is not exactly what we do for war situations. One of the things that is nice about business is that the metrics of success are much more understood - we all agree that making money, being more environmentally sound and being good to your staff are all good things in business - which is very easy to evaluate. Military things are a little bit more ambiguous.”

Yet there are similarities “A war game for a commercial client could serve the same purpose: it could test a strategic plan, a new technology or product, or a potential acquisition or stategic alliance in advance of the company's D-Day.”

The games that Mr Herman and his colleagues design for companies are played by teams over one or two days. The design of the game can take up to 90 days in which the consultants collect data, write computer programs and decide on the format of the game. The game is a cross between a “competitive sport” and role play of a business situation by teams. The situation can be anything from a merger or acquistion, a product launch, R&D investment to price wars. “They [the teams] make decisions. There is no risk, but there is real stress on the decisions. You get to screw up. It is competition. There are winners and losers here.

“We have a way of calculating, both with expertise and with computer models and all that, who has done better based on what they are doing relative to the market.” Exactly how they do this is “the secret sauce” and not something that he will explain.

Often in business war games, it is the team playing a competitor that comes up with the winning strategy. “If you put people who are very smart in other people's shoes, they all of sudden come at the problem in a very different way.”

Problems arise when other people do not take war games seriously. Apparently General Anthony Zinni, who headed the US Defence Department's Central Command in the 1990s told everyone what was going to happen in Iraq - but nobody listened. “He said: 'We did this war game.' But I guess that it just wasn't compelling enough,” Mr Herman said.

www.wargamingforleaders.com

Explore Management

• MBA